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Own a home in Plano? Your tax rate will be lower. But your tax bill will be higher.

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City of Plano
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A lower tax rate won't prevent Plano homeowners from seeing higher tax bills later this year.

Property taxes in Plano are going down — but most homeowners will have a higher tax bill. That may sound strange, but Plano city officials say it's just how the math works.

Tax appraisals for properties in the area have gone up, which means the taxable value has increased. Bo Baffin, the chief appraiser for Collin County, said the rising home values in Collin County are following a statewide trend.

“Over the last couple of years, the residential property values have exploded, not just in Collin County, but pretty much across the state,” he said.

The average home value in Plano in the 2021-2022 fiscal year was $396,673 according to city data. In the 2022-2023 fiscal year, the average home in Plano is worth $493,960. That’s an increase in value more than $97,000. Under state law, homeowners are responsible for no more than an additional 10% from their home’s previous value — so the average homeowner in Plano can expect to pay taxes for a property value of $436,340.

Baffin calculates property values for the county by looking at what buyers and sellers consider in the market. He said he looks at many factors, including the local school district, property size, location and amenities.

Plano City Council is set to adopt a new property tax rate Sept. 12. The council has several rates to consider.

The maximum rate council members can set is 43.8 cents per $100 of assessed property values — any higher, and it’d have to be approved by the voters. Plano’s current is rate 44.65 cents. Mark Israelson, the city manager, has proposed lowering the rate by two cents.

Even though the rate he’s proposing is lower, Israelson said the average homeowner in Plano should still expect higher property tax bills because of the increase in home values. The average homeowner in Plano paid $1,417 in property taxes in 2021 — under Israelson’s proposed rate, the average homeowner would owe $1,685 in property taxes.

There’s another rate on the table called the no-new-revenue rate. That rate is calculated by the tax assessor. It’s designed to keep the revenue from property taxes roughly the same as the previous year. When property values go up, the no-new revenue rate goes down. The no-new revenue rate for Plano the upcoming fiscal year, which starts Oct. 1, is 41.77 cents per $100.

As city manager, Israelson calculates Plano’s budget based on the city’s resources and resident needs. After assessing the needs of the community, he recommended a rate that’s a little higher than the no-new revenue rate.

Karen Rhodes-Whitley, the city’s budget director, said going down to the no-new revenue rate would mean the city would have to cut $4.5 million from its budget.

The average homeowner in Plano would still see an increase in their tax bills under the no-new revenue rate. Rhodes Whitley said if city council wanted to set a rate that would not raise tax bills, the rate would have to be as low as 35 cents.

“We can't go down that low,” she said. “We really would have to cut services.”

Israelson said the city doesn’t want homeowners to pay more in taxes than what’s needed to provide necessary services.

“We only want to ask for the amount of resources needed to meet that level and to achieve those goals,” he said.

The council is set to continue budget discussions on Monday. A public hearing may be scheduled for Aug. 22 or Sept. 12, the day city council is set to adopt the tax rate.

Got a tip? Email Caroline Love at clove@kera.org.

Caroline Love is a Report For America corps member for KERA News.

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Caroline Love covers Collin County for KERA and is a member of the Report for America corps. Previously, Caroline covered daily news at Houston Public Media. She has a master's degree from Northwestern University with an emphasis on investigative social justice journalism. During grad school, she reported three feature stories for KERA. She also has a bachelor's degree in journalism from Texas Christian University and interned with KERA's Think in 2019.